Melbourne-based developer Kokoda Property has labelled concerns about an oversupply in the Brisbane apartment market “overplayed”
after snapping up an inner-city site at Milton for $12.5 million.
The 1209-square-metre site, which houses a low-rise commercial building at 19-23 McDougall Street, was sold with a permit in place for 235 apartments. It was offloaded by Prime Space Projects, an Adelaide-based development company that paid just over $9 million for the site just over two years ago.
“The Brisbane oversupply story is very much overplayed. Buyers are lot more discerning and the market is maturing,” Kokoda director of sales and marketing Sam Tucker said.
“Milton is much less competitive in terms of alternative products available. This site ticked all the boxes in terms of lifestyle and amenity,” Mr Tucker said.
He said there was a growing appetite among local buyers for larger two and three-bedroom apartments. “As in Melbourne, the downsizing market has kicked into gear in Brisbane.”
The apartment project at Milton, to be designed by architects Cottee Parker, will have a high proportion of two and three-bedroom residences with “hotel-style amenity”.
The Milton acquisition is Kokoda’s second in Brisbane alongside its Chester & Ella two-tower development in Newstead. This project has racked up more than $117 million in off-the-plan sales so far.
Obtaining funding has become tougher for Brisbane developers, with Metro Property Development, the city’s biggest apartment builder, recently securing funding from a Hong Kong-based hedge fund to complete its latest tower.
Mr Tucker said Kokoda had received offers from the major banks to fund its Newstead towers and had sourced private funding for overseas buyers at loan-to-value ratios of 70 per cent.
Kokoda, founded in 1998 by former Jeans West director Mark Stevens, has three projects under construction in Melbourne and is looking to expand into Sydney.